Okechukwu: No better option to stimulate economy than borrowing
Osita Okechukwu is the Director General of Voice of Nigeria (VON). He spoke to LEO SOBECHI, on the vexed issue of sloppy borrowing plans of the Federal Government, among other socio-economic worries.
Many Nigerians believe the Buhari administration has not shown enough preparedness to successfully manage the nation’s economy, and as such, allowing it to obtain $30bn in external borrowing would pave the way for long-term damage of the economy; how do you react to that?
This question of Buhari’s preparedness keep popping up at each forum and one reminds this school of thought of Shina Peter’s lyrics that without money nothing can be done. And why is it that among all the factors of production – capital- is singled out as the leader of the system? Nobody talks of labour, rather, we hail capitalism, as the leader of the production process and by extension, the economy.
In other words, no matter how prepared any president is, if the economy is prostrate, and the money meant to execute projects is scanty, definitely not much can be done. Buhari inherited a mono-product economy where the oil revenues, which accrued in the bounty seasons, were squandered and the price of that only source of revenue crashed. To compound matters, as pro-people and masses-oriented person, the pathetic record he met showed that over twenty states owed workers’ salary, ranging from six to eighteen months.
Experts say the President’s loss of economic direction in the first six months of the administration led the country into recession…
Ours is a primitive economy, which is prone to shock any time the vagaries of international oil price strike, so to single out six or ten months without taking into account the unintended consequences of planlessness and squandermania of yore is worrisome.
We are witnesses of how the previous regimes embarked on a nebulous economic policy, which says that government has no business in business and that it’s the private sector, which will drive our economy. They did not consider that in a primitive economy like ours, that majority of those who call themselves captains of industry have no factory, talk less of industries. What were the outcomes: Gross unemployment, uncertainty and despondency? Mr. President has no better option to stimulate the economy than borrowing; more so when the creditors and Nigerians have implicit confidence on him as a prudent manager.
What is the guarantee that the funds would be well invested within the next sixteen months?
Even President Buhari’s traducers can vouch for his integrity quotient, so it is our collective duty to monitor the implementation and those in charge. Buhari is not everywhere; therefore, all hands must be on the deck. Nigeria is a big elephant and we are talking about very huge projects. I should say we are lucky, because to compliment the integrity of Mr. President and Vice President is the truism that most of the loans are not coming in cash, they are project and equipment denominated.
Scepticisms over the $30bn loan revolve around fears that the money is meant to help the president and his party, APC to fund the 2019 election?
The unfounded scepticism is a hangover of the Peoples Democratic Party’s (PDP) regime; where monies meant to fight the Boko Haram insurgency were converted into slush fund, dished to party leaders according to their political rating. Some PDP bigwigs got billions, and some minions, millions.
It can’t happen under Buhari’s watch. God forbid! He has raised the bar of war against corruption by touching the untouchables. The PDP in their sixteen years were aware of the rot in the judiciary, rather than cleansing the Augean stable, they fueled it. This is the tragedy Buhari is confronting and the change we are hammering on.
One of the major arguments for the removal of fuel subsidy was that the savings will go into providing critical national infrastructure, including the ones you mentioned. Why is the saving from subsidy removal not serving that purpose now?
I used to ask the same question, until I was educated during a strategic meeting, that what is being saved is being borrowed to fund importation of petroleum products, because our dear country that used to earn over $2billion a month now earn less than $500 million per month. The paradox is yes, we have saved from importation of petroleum products, but we have not saved from importation of rice, wheat, toothpick, medicals etc.
The Buhari administration made much fanfare about Treasury Single Account (TSA), how far has it blocked loopholes for fund leakages in the light of recent alarm by the Minister of Finance that the Customs and other government agencies still stink of corruption?
TSA is a game changer, which has saved billions for Nigeria. It has blocked ministries, departments and agencies from operating public funds like personal accounts. In the past, some ministries, departments and agencies used to operate seven different accounts in different banks at the discretion of bank managers, all that has changed. On the Minister of Finance’s allegations, one has no facts on the matter.
Do you not think that the lack of financial openness was why the World Bank recently rebuffed Federal Government’s loan demand?
World Bank rebuff, am not aware, the only thing I know is that Africa Development Bank (ADB) is among the consortium of creditors in the current borrowing plan. And ADB is a World Bank affiliate.
Given the huge amount of domestic debt, do you not think taking the $30bn external loan would perpetually enslave Nigerians, especially the unborn generations?
I am one of the advocates of $50 billion loan in the next three years to erase the gross infrastructure deficit, without which Nigeria will accelerate from recession to deep depression. We must borrow to stimulate our economy and return to prosperity.
To me, the $4.8 billion for Mambilla for instance, is a good deal, because it will generate about 4,000MW, which is more than the current electricity profile. It will also irrigate thousands of hectares of arable land for agriculture, thereby generating thousands of employment. This is why we are requesting for Enugu Coal, 2nd Niger Bridge, Maiduguri-Port Harcourt Rail line, Adani-Anambra Rice Belt to be accommodated.
We cannot be in self denial, for any loan which could make public agencies like Voice of Nigeria to stop expending about N16 million every month on diesel, one will be in full support. The success of projects like Mambilla hydroelectric project will reduce the cost of production in both private and public sectors. This is the route to economic growth, because more people would be lifted out of poverty.
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